A Special Warranty Deed is a deed to real estate. In this the grantor (the seller of the property) warrants only against anything that occurred during his actual ownership.

In other words, grantor doesn’t guarantee against any defects in clear title that existed before he took possession of property. The guarantee is not limited to the time the grantor owned the property-it extends back to the origin of property. It is a promise to the grantee that the grantor will warranty any prior problems with title. Not just during the seller’s ownership, but back along the chain of ownership. Warranty deeds are very similar to grant deeds with one main exception. Grant deeds contain two guarantees but warranty deeds contain three guarantees:

• The grantor states there are no hidden liens or encumbrances on the property apart from those the seller has already told the buyer about.
• Grantor declares that he or she is the owner of the property and has a right to sell it to you.
• The grantor guarantees that if the title ever fails, he or she will compensate the grantee for any losses, even if the defect was caused by a prior owner. (This guarantee may not be beneficial as the grantor may be deceased or unable to follow through if title problems are found in the future)

What is it?

A warranty deed should contain an accurate description of the property being convey. Be sign and witness according to laws of state where property is locate, and be deliver to purchaser at closing. The deed should be record by the buyers of the property at the public records office. It is usually located in the county courthouse. Recording a deed gives “notice to the world” that a particular piece of property has been sold. Though the grantor guarantees good title, the deed is no substitute for title insurance. It is because a warranty from a grantor who later dies or goes bankrupt may have little value. Warranty deeds usually require that title search be conducted by a trained professional to ensure that the property is free. It is clear of liens or encumbrances. Any lien or encumbrance discovered would effectively “cloud” the title of the property.

Special warranty deed:

A special warranty deed varies only in that it limits the seller’s warranty to title problems that come up. While the seller owned the property, but gives no warranty for problems prior to that point. A warranty deed is use when a grantor (seller) wishes to transfer ownership of piece of property to grantee (buyer). It is use to provide the greatest protection to the purchaser because the grantor pledges or warrants. They legally own the property and that there are no outstanding liens, mortgages, or other encumbrances against it. Special warranty deeds are often use by grantors like builders. Often builders only own the property long enough to build on it and therefore utilize a special warranty deed to avoid risk from something that happened to cloud title before their ownership.